Nissan starts U.S. production push with 2004 Maxima

SMYRNA, Tenn. -- The first U.S.-built Maxima that was built here last week was the beginning of a complex and aggressive era for Nissan's North American operations.

The 2004 Maxima is the first step in an unprecedented product drive for Japan's No. 2 automaker. In a span of 12 months, Nissan North America Inc. will have gone from building three vehicles in one U.S. plant to producing eight in two factories. Four of those eight models are new to the automaker, and a fifth, the redesigned Maxima, is new to the U.S. manufacturing group.

Moving Maxima production out of Japan and into Nissan's 20-year-old Tennessee factory wasn't an easy decision. The car has been a bedrock of Nissan's lineup in the past decade, bringing the company acclaim and helping to lure customers into Nissan dealerships during times when the brand had little other excitement to offer.

Jed Connelly, Nissan's senior vice president for sales and marketing, said many people were reluctant to tamper with a good thing.

"When we first heard we were going to build the Maxima in Smyrna, we had a lot of questions as to why," Connelly said as the first U.S. Maxima rolled down the line. "My response was, 'Why not?' "

Five years ago, the Japanese company would have left the question at "Why?"

But since Nissan's reorganization in 2000 and its global alliance with Renault, the company has thrown off many of its hesitations.

This summer, it is launching U.S. production of V-8 truck engines. Those will enable Nissan to launch a second factory in Canton, Miss., where it will enter the full-sized pickup and full-sized sport-utility segments simultaneously, as well as launch its first Infiniti-brand production in North America.

For U.S. retailers, the feat will mean a bonanza of products. Between the two U.S. factories and an existing production line in Aguascalientes, Mexico, Nissan will have 1 million units of capacity on tap for U.S. sales. That represents 250,000 units more than Nissan and Infiniti brands sold together in 2002 - including vehicles imported from Japan.

The pressure to deliver is on Nissan's U.S. manufacturing organization, a team headed up in Smyrna by Emil Hassan, senior vice president for manufacturing, purchasing, quality and logistics. Hassan's operations must expand in the number of products and volume.

To produce the Maxima, he told some of Smyrna's 6,000 workers last week, the company will need to hire another 1,000 employees in Smyrna and 1,000 more at the expanding Decherd engine plant.

That boost in employment will allow Smyrna to produce about 500,000 vehicles a year, compared to 420,000, making it the largest Nissan plant in the world.

But that will give Connelly's retailers just 80,000 Maximas. Last year, dealers sold more than 98,000 Maximas, and more than 102,000 the year before.

Part of the decline, Connelly said, was due to the discontinuation of the car's lower-priced GXE version.

Dan Gaudette, Nissan's senior vice president for U.S. manufacturing, said Smyrna expects to push the Maxima to full line speed in just four weeks. He said expanding Maxima output might be possible, although not immediately.

"If Jed asked for 100,000, we'd see what we could do to support it," Gaudette said. But he said parts suppliers complicate the equation. "You can't tool them up and (get) them to produce 80,000, and then tell them to go up to 100,000."

Only about 15 percent of the cars' parts are in common, but as many as 85 percent of their suppliers are in common, according to Michael Steck, Nissan's director of supply chain management.

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